Assistant Professor of Public Administration Soomi Lee discussed the effects of supermajority vote requirements on taxes during her lecture “The Effect of Supermajority Vote Requirements for Tax Increase in California: A Synthetic Control Method Approach” Monday in the President’s Dining Room.
Lee published her studies in June in a paper with the same title as the lecture. She presented her research Monday with graphs.
Supermajority tax measures require more votes than a simple majority, which needs 50 percent. The exact percentage for supermajority varies between states, with some states being three-fifths while others require two-thirds.
Lee discussed the challenges in identifying the effects of supermajority vote requirements. The supermajority states are not consistent in what tax legislations should be passed through supermajority.
For example, in Arkansas, sales tax and alcohol are not subject to supermajority, while in Michigan, it applies to property taxes only. However in Kentucky, supermajority applies only for odd-number years.
“I thought this was a joke,” Lee said while the audience laughed in disbelief.
It is also ambiguous as to whether these states with inconsistent SMVR are actually supermajority states or not.Different states also have different percentages for vote requirements. It is 67 percent for California.
“This rule is meant to constrain legislators, not voters,” Lee said.
Other challenges include frequent amendments and inaccuracies. For different states, amendments to SMVR may be changed many times to different categories, such as corporate income tax, tax increase, property tax and more.
It is confusing because there are too many differences for tax legislations. Inaccuracies arise when the SMVR are changed frequently and voters are not certain which rule is still effective.
SMVR was suspended in 2001, 2005 and 2010 in Washington. Lee analyzed the effects of SMVR through a case study on California.
She excluded property taxes from her study due to the passage of Proposition 13, the People’s Initiative to Limit Property Taxation, in 1978. This proposition limits the property tax California residents have to pay to one percent or less of property value.
Lee studied state-level panel data from 1960 to 2008 to unravel the effects on tax burden by using synthetic control methods.
She estimated the effects of SMVR on state non-property tax burdens in California to be a reduced average of $1.44 per $100 of personal income from 1979 to 2008. This amount is equivalent to 21 percent of the total tax burdens annually.
However, lower taxes may not always be a positive thing to voters.
“I’m not saying lower tax burden is good,” Lee said. “We have to look at overall effects such as (a decrease in) spending on public social goods.”
The lecture initially sparked confusion and many questions arose from the attendees.
“(Lee) tried to avoid conflicts within opinions by including so many variables,” said Elizabeth Craig, junior mathematics major.
“She’s taking a process used in another field to this field and she had to convince people this is the real deal,” said Al Clark, professor of humanities. “It’s a brave thing.”
The audience was interactive and the lecture lasted overtime.
“Dr. Lee did a great job utilizing a new approach in analyzing the supermajority rule on the tax burden of the people,” said Abe Helou, dean of College of Business and Public Management. “Actually, I wasn’t aware the supermajority had a negative effect on individuals.”
“I thought it was a good opportunity for faculty to discuss relevant issues and methodologies,” said Gus Sjobeck, junior psychology major. “I was not aware of theses issues. It was a good opportunity to familiar myself with taxes.”
Cody Luk can be reached at email@example.com.